Tuesday 20 March 2012

Base rates and piracy

Since NZ's anti-downloading regime came into force, we've seen a big drop in total Torrent traffic and a big increase in secure tunnelling and remote access protocol use. The latter two are much less likely to draw infringement notices from rights-holders.

Does this mean that downloaders have just shifted tactics? It's impossible to tell from the National Business Review's article. Here's the graphic:

But as we can't tell anything about the ex ante base rates for tunnelling or remote access, we can't tell whether those increases are effectively replacing Bittorrent use. Total downloading could be up, down, or constant; we just can't tell. I'd be surprised if that many people were tunnelling prior to the law change; I'd bet on total downloading consequently being down.

Downloading and not paying for copyrighted works that are legally available in New Zealand when you would have paid for the works were the free version unavailable seems unambiguously wrong. But I have a hard time seeing where we move from "right and fine" to "wrong" in this continuum.
Protagoras: Let us agree that enjoying copyrighted works for which we could have paid but chose not to pay is wrong.

Glaucon: Yes, let us agree to that, Protagoras. But you borrowed my legitimately purchased DVD of Idiocracy last week. You enjoyed it, and returned it to me.

Protagoras: Yes indeed. The sleeping man's struggle, and failure, to teach virtue and wisdom to the diminished men of the future was instructive. But when you purchased that DVD, you also purchased the right to lend it to me. Consequently, you paid more for the DVD than you otherwise would have paid; the rights-holder was compensated.

Glaucon: Indeed he was, Protagoras. Know too though that I have been ripping my DVDs onto hard discs: to protect against the failure of physical media when the children have sticky fingers, to save room in the bookshelves, and to avoid the irritating copyright warnings which the DVD-makers in their wisdom will not allow us to skip.

Protagoras: Is such "ripping" here allowed?

Glaucon: Shifting the format of a purchased file is entirely legal for music. Let us restrict ourselves to consideration of the old Portishead CD I lent you a month ago, the return of which I still await.

Protagoras: So stipulated. And I will return the CD to you Monday hence.

Glaucon: That is appreciated. But know too that I ripped the CD to my hard disc some time ago. Does my having ripped the CD make my lending of it immoral?

Protagoras: If you did not listen to the ripped copy of the CD while the CD was in my possession, it is hard to see what harm could have been done to the rights-holder. It would have been wrong to sell the CD after ripping it, but I see no harm in your having lent it.

Glaucon: I am heartened to find we have not acted immorally, at least thus far. Suppose now that, instead of lending you the physical media, I lent you a thumb-drive with the files along with a promise that I would not listen to the music on the CD while you were listening to the mp3s?

Protagoras: The form of the lending ought matter not. If we were not both listening to the same song at the same time, the situation is analogous to your having lent me the physical media.

Glaucon: I agree, Protagoras. Not suppose that, instead of lending you a thumb-drive with only that CD, it were more convenient for me to lend you my backup hard drive with my entire music library - all of which consists of ripped versions of CDs I legitimately purchased. Does anything change?

Protagoras: So long as neither of us are listening to the same song at the same time, I see not the difference between this case and the case in which we meet frequently and you lend me CDs.

Glaucon: Now, suppose that I quickly require the return of my backup drive that I might update its contents. If you have not had the time yet to listen to that Portishead album, would it be wrong for you to make a copy of the backup drive for later listening?

Protagoras: I see where you are headed with this line of argument, Glaucon. You will attempt to argue that we each could be in possession of copies of each others' files, without loss of virtue, so long as we are not listening to the same files at the same time. And, with sufficiently large music libraries, the likelihood of our listening to the same file at the same time is so small as not to merit consideration.

Glaucon: Indeed. The argument seems to imply that we may all share .mp3 copies of CDs we have legitimately acquired, so long as we share sufficiently large numbers of .mp3s that the likelihood of simultaneous listening to any particular track is very small.

Protagoras: Whether the law allows it is not necessarily a measure of the virtue of a thing, but would the law allow me to make a copy of your backup drive?

Glaucon: No, it does not.

Protagoras: I think I have identified a flaw in your argument. When you lend me a CD, you remove from yourself the option of listening to the CD, even if would not have exercised that option. You feel the loss of the CD and it pains you; had you not the backup copy, you surely would earlier have demanded the return of the Portishead CD. An extensive music library provides option value. Lending the CD diminishes that value for the entire period that the CD is in my possession, while only restricting yourself against listening to the file when I might also be listening to the file barely affects that option value.

Glaucon: But, by your earlier argument, the ability to lend you the CD increased the amount by which I valued the CD, did it not? So being able to lend you a song for only three minutes, rather than for the months you tend to take to return CDs, surely increases that CD's value and increases the price I would then have been willing to pay for it at the outset. Imagine now a virtuous music-borrowing service. We each upload our CD libraries to the service and listen to the music through a specially configured music player that prevents more than one person from listening to any particular uploaded file at the same time. Surely this is akin to a very efficient borrowing regime.

Protagoras: I must admit the force of your logic here. And we can take it one step farther. Where once it was the CD or the album that was the natural musical unit, it now is tracks. But we could similarly view the natural unit as being tiny measures of a song. So long as none listened to the same tiny measure of a song at the same time, the analogy to borrowing seems to hold. And so the virtuous player need only slightly stagger individuals' playing such that very small units of time separate each listener's enjoyment of the song. If we both wish to listen to the same song, the player might delay my song initiation by a second such that we are not delivered the same tone at the same time.

Glaucon: Now, Protagoras, is there any practical difference between the regime you describe and your simply copying my backup drive? It is impossibly unlikely that we could ever decide to begin listening to the same song at exactly the same time.

Protagoras: I see none. And external hard drives are now about $0.10 per gigabyte.

Glaucon: I still fear we have erred in our logic. But I see not how. Shall we go shopping?

Protagoras: Agreed. But we should also be sure not to lend our backup drives to too many people; if a very very large number of people all share the same files, the chances that two individuals might listen to the same tone from the same song at the same time potentially becomes non-trivial. And moral responsibility for the act of theft then becomes more difficult to determine than responsibility for the death of one killed accidentally by a thrown javelin.
What, if anything, have Protagoras and Glaucon missed?

Nothing in this post ought be interpreted as advocating anything deemed illegal in the jurisdiction in which you might happen to live.


  1. The record companies, movie studios, etc. would have us believe that every case of downloading or copying of copyrighted material is lost revenue for them. I'm not convinced that this is the case.

    Lets place ourselves in a bar of our choosing, one with an extensive menu of beers available to try. If said bar allowed for free tastings of its entire range I would be inclined to try most of the beers on tap. However if I am forced to spend my (mostly) hard-earned dollars in order to sample each beer I am going to spend said dollars on a style of beer I am likely to enjoy, in my case pilsners, pale ales, and other lager-ish styles, with the occasional brown ale thrown into the mix. But I'm unlikely to spend money to sample stouts and similarly dark beers because I tend not to enjoy that style as much. Similarly the $2 for tastings at the recent beer festival here in Chch was awesome, it allowed me to try beers I would ordinarily not have bought, although the range was so extensive so I focused a lot on ciders and lagers anyway. There simply wasn't time to try everything, but money wasn't the binding constraint.

    If we now return ourselves to the real world, where beer isn't free and neither is music, there are no doubt plenty of people who have extensive collections of "free" music who would only have purchased a fraction of that (I estimate 10%, but this is purely a guess) had they been forced to pay retail prices. This suggests two things to me:
    1) that record companies and the like are greatly over-estimating the loss to them from the illegal download of music, etc.
    2) that retail prices for music, etc. are too high, and that piracy is the inevitable result of this.
    Somebody has probably researched this to try to estimate the actual vs claimed loss, so no doubt there are figures out there, but I'm too bone lazy to go looking :)

    1. Whilst I agree that the copyright loss stats are well overstated (I seem to remember there was a report a few years ago where it appeared that the cost of music piracy in NZ was calculated simply from the total number of blank CD-Rs sold) I'm not so sure I agree with the whole "I only pirate stuff that I would never buy so that makes it ok" argument.

      I go for the simpler 'if people can get something at little (perceived) cost/risk to themselves they will and then they'll rationalise it to themselves so that they feel better' argument.

      I also haven't yet seen the 'it's too expensive so I can nick it' argument going down well in the courts recently. However I must go and try that approach with the local Mercedes dealer sometime.

    2. @Duncan I agree that the courts wouldn't be sympathetic to these arguments.

    3. @Duncan: I set things up to address the case that is most clearly economically troublesome. If somebody who never would have bought decides to download, there is no economic loss. If somebody who couldn't legally access the product decides to download, results are ambiguous.

      And I don't disagree that folks will go for ex post justifications either.

      But I do want to know where my sophists go wrong.

  2. Eric,

    Have you ever asked your students about their music and movie purchases? Out of curiosity I do that every year, and in 2012 roughly 80% of them do not pay for what they read/watch. I prefer to purchase books and music, but I often find myself in the I tried to watch The Game of Thrones... situation. I can and want to pay, but the media is unavailable; a bit like you trying to watch Weird Al videos in NZ.

    This makes me wonder if media companies are really in to self-destruction: if the incentives align towards dodgy download for people like us (willing to pay), what's left for our students?

    @Duncan I don't buy the Mercedes analogy, if I drive off with the car the dealer is left with nothing. If I download/copy a file the file is still there.

    (Same disclaimer as Eric: not advocating anything yada yada yada)

    1. I'll add the survey this year. I do do a week on copyright, and hitting the torrents seems ubiquitous...

    2. @Luis You beat me to it. I was going to make the same comment re the Mercedes analogy. As sad as this makes me seem I was mulling over how to word it in bed last night :)

  3. This comment has been removed by a blog administrator.

    1. Sorry, Peter; I nix stuff that might make the blog get hit by content filters unless there's exceptionally good reason.